EU General Court Rules Italian State Aid to Airlines Discriminatory

A Ryanair jet lands in Italy.
Photo Credit: Fabrizio Berni (GFDL or GFDL), via Wikimedia Commons
Len Varley - Assistant Editor 5 Min Read
5 Min Read

In a win for Ryanair, on May 24 the EU General Court ruled that Italy’s €130 million state aid package to airlines was discriminatory and therefore illegal.

The aid package was only available to airlines with an operating licence issued by Italy, which excluded foreign airlines such as Ryanair.

The court found that the Italian government had failed to provide a convincing justification for the discriminatory nature of the aid package. The court also found that the aid package would distort competition and harm consumers.

A victory for Ryanair


The ruling is a victory for Ryanair, which had challenged the aid package in court. Ryanair argued that the aid package was unfair and would give Italian airlines an unfair advantage.

The ruling is also a setback for the Italian government, which had argued that the aid package was necessary to support the country’s airlines during the COVID-19 pandemic.

The ruling is likely to have implications for other EU countries that have provided state aid to airlines during the pandemic. The court’s ruling suggests that any state aid that is discriminatory will be found to be illegal.

The ruling is also a reminder of the importance of the EU’s state aid rules. The rules are designed to ensure that state aid does not distort competition and harm consumers. The court’s ruling shows that the EU is committed to enforcing these rules.

Ryanair welcomed the EU court decision, with an airline spokesman saying: “One of the EU’s greatest achievements is the creation of a single market for air transport.”

“The European Commission’s approval of the aid scheme limited to airlines with an operating licence issued by the Italian State went against the fundamental principles of EU law.”

” Today’s judgment confirms that the Commission must act as a guardian of the level playing field in air transport and cannot sign-off discriminatory State aid under political pressure by national governments. The Court’s intervention is a triumph for fair competition and consumers across the EU.”

[monsterinsights_popular_posts_inline]

Background


The COVID-19 pandemic has had a devastating impact on the airline industry. Airlines have been forced to cancel flights, lay off staff, and take on significant debt. In order to support the industry, many governments have provided state aid to airlines.

The EU has strict rules on state aid. These rules are designed to ensure that state aid does not distort competition and harm consumers.

The rules also require that state aid be justified on the basis of public policy objectives, such as the need to protect jobs or to promote economic development.

The Italian State Aid Package


In October 2020, the Italian government announced a €130 million state aid package to airlines. The aid package was designed to help airlines recover from the COVID-19 pandemic.

The aid package was only available to airlines with an operating licence issued by Italy. This meant that foreign airlines, such as Ryanair, were excluded from the aid package.

Ryanair Challenges the Aid Package


Ryanair challenged the Italian state aid package in court. Ryanair argued that the aid package was discriminatory and would give Italian airlines an unfair advantage.

The EU General Court agreed with Ryanair. The court found that the Italian government had failed to provide a convincing justification for the discriminatory nature of the aid package. The court also found that the aid package would distort competition and harm consumers.

Implications of the Ruling


The ruling is a victory for Ryanair and a setback for the Italian government. The ruling is also likely to have implications for other EU countries that have provided state aid to airlines during the pandemic.

The court’s ruling suggests that any state aid that is discriminatory will be found to be illegal. This means that other EU countries that have provided state aid to airlines that is only available to domestic airlines may also face legal challenges.

The ruling is also a reminder of the importance of the EU’s state aid rules. The rules are designed to ensure that state aid does not distort competition and harm consumers.

The court’s ruling shows that the EU is committed to enforcing these rules.

TAGGED:
You Might Also Enjoy